Juniper Networks (NYSE: JNPR) stock jumped as much as 9% Friday following news another activist shareholder has taken a sizable stake in the networking gear company.
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- Stock Market Today Fades Along with Chances of Fiscal Cliff Deal
- Check Out What's Fueling Gains in the Stock Market Today
- Stock Market Today: These Stocks Are Still on a Hot Streak
- Even with Wells Fargo (NYSE: WFC), Investors Should Read the Fine Print
- Standard Chartered Bank Scandal Triggers U.S. Regulator Fight
- Bank Earnings Lead the Stock Market Today
- JPMorgan (NYSE: JPM) Earnings and Five Others That Could Surprise You
While the big banks may have the attention of the Street right now, it's the smaller regional and community banks that are among the best stocks to buy now.
These small bank growth stocks are starting to show dazzling growth as their balance sheets improve dramatically. And they are still very early in the recovery cycle, so there is still plenty of time for individual investors to catch this train...
The stage was set Thursday night when a vote on Republican House Speaker John Boehner's Plan B, a fiscal cliff compromise to be presented to U.S. President Barack Obama, never even made it to vote among fellow Republicans. When word came of the setback, all major overnight future indexes sharply dropped.
When markets opened Friday, the slide continued. Shortly after noon, the Dow Jones Industrial Average slumped 176 points, the Standard & Poor's 500 Index dropped 20 points and the Nasdaq was lower by 43.
Investors appear to be bracing for the worst with just 10 days left before America falls over the cliff, with a deal is nowhere in sight.
Stocks on the Move TodayShares of Research in Motion (Nasdaq: RIMM) rang lower Friday, sinking almost 20% in mid-afternoon trading.
RIM reported third-quarter earnings after the close Thursday that showed the BlackBerry maker swung to profitability, but lost about one million subscribers in the quarter. It marked the first time membership has fallen. The real test, analysts say, comes next quarter following the much anticipated release of the company's new Smartphone, the BlackBerry 10.
The market was also lifted by encouraging comments from European Central Bank President Mario Draghi on the fiscal health of Spain. Speaking at his regular monthly news conference Draghi stated the ECB is ready to buy bonds when necessary and that the ECB will not lower its record low 0.75% refinancing rate.
Here are today's other major stories:
- Don't expect a great September jobs report- There are a few mixed labor reports to digest a day before last month's unemployment and nonfarm payroll numbers are released. Automatic Data Processing (ADP) yesterday reported the economy added 162,000 private-sector jobs in September. This was better than projections for 140,000 new jobs but much slower than last month's downwardly-revised figure of 189,000 jobs. Investors monitor ADP's numbers for clues on what the government might report, but ADP does not include public sector jobs and is not a great indicator of Friday's Labor Department's report. The Labor Department reported today that 367,000 initial jobless claims were filed last week, slightly higher than expected. The less volatile four-week moving average remained unchanged at 375,000. "The trend is still looking fairly stable. The labor market is improving but it is not really gathering direction for better or worse, it is still just plodding along," 4CAST economist Sean Incremona told Reuters. One more piece of data to look at is layoffs from outplacement firm Challenger, Gray & Christmas. It said U.S.-based employers announced plans to cut 33,816 jobs in September, down 71% from a year earlier. On average economists expect tomorrow's report to show 113,000 jobs were added in September and that unemployment ticked back up to 8.2%.
- Factory orders decline by most in 3 years- The Commerce Department reported that factory orders fell 5.2% in August after rising 2.8% in July. The decline was fueled by a 102% plunge in demand for commercial aircraft which led to a previously reported 13.2% drop in durable goods. Overall the 5.2% decline from a month earlier was expected by economists but continues the trend of a slowdown in manufacturing activity. One positive is that orders for business equipment and software, often considered a gauge of business confidence and investment plans, rose 1.1%. "These data indicate that the recent softness in manufacturing activity and capital spending is likely to continue, at least for several more months," Steven Wood, president of Insight Economics LLC in Danville, California, said in a note to clients.
- QE3 rally halted- After last week's Federal Reserve inspired surge where each U.S. market gained at least 2%, stocks opened lower Monday. The selling pressure might not last long though as investors are ready to profit off of the Fed's latest moves. "It looks like we need to take a small breather after the sizable rally that we've had," Randy Frederick, managing director of active trading and derivatives at Charles Schwab Corp., told Bloomberg News. "There's the potential for a small pull-back, but I think we will move back into the bull territory later in the week unless there's an unexpected negative news event."
The San Francisco-based banking giant appeared to emerge relatively unscathed from the 2008 financial crisis. It was named Most Valuable Bank Brand in the United States and number two worldwide in 2012.
It's even a favorite and primary position in legendary investor Warren Buffett's iconic Berkshire Hathaway (NYSE: BRK.A, BRK.B) portfolio.
It has avoided the reputation of being manipulative, like its rivals - but that doesn't mean investors aren't getting burned.
An article last week from The New York Times showed that investors need to fully understand the risks of their investments, and can't always trust their bank - no matter the reputation - to look out for them.
Turns out investors who purchased an unusual security suffered steep losses, while Wells Fargo came out ahead. The risks, and there were many, were deeply hidden in the prospectus, a wordy and complicated document few investors understood.
New York state regulators Monday accused Standard Chartered Bank, a U.K.-based multinational operating in more than 70 countries, of money laundering. The allegations claim the bank covered up about $250 billion of illegal transactions with Iranian clients.
"In short, SCB operated as a rouge institution," Benjamin Lawsky, head of New York State's recently created financial regulator, said in a legal order issued Monday night.
Standard maintains the claims are inaccurate, and that 99.9% of its dealings with Tehran complied with regulations. The bank will faceoff with regulators next week.
But now other U.S. regulators say they don't think Standard Chartered Bank's wrongdoing was nearly as egregious as originally reported.
After five consecutive negative trading days the markets have finally rallied thanks to strong earnings reports from Wells Fargo and JP Morgan.
JPMorgan Chase (NSYE: JPM) and Wells Fargo (NYSE: WFC) both reported earnings this morning before the opening bell. The definitive winner of the two is Wells Fargo.
Wells reported another record quarter of earnings while JP Morgan felt the consequences of its "London Whale Trade."
JP Morgan announced the bet would cost the company a total of $5.8 billion, the high end of analyst's predictions. Of that loss $4.4 billion is accounted for in this quarter and the remaining $1.4 billion was put on last quarter's balance sheet.
What is positive about JP Morgan's earnings is the fact that the company was able to post profits despite the trading loss.
JPMorgan posted second-quarter net income of $4.96 billion, or $1.21 a share, compared with $5.43 billion, or $1.27 a share a year earlier.
The derivative loss after taxes reduced earnings per share by 69 cents, the company said.
Wells Fargo boosted its earnings 17% compared to the same quarter a year ago. Wells reported earnings of $0.82 per share beating expectations by a penny.
Wells Fargo stock (NSYE: WFC) is up over 3% and JP Morgan stock (NYSE: JPM) is up almost 5% as of noon.
The markets are ignoring the main economic indicator released today. The University of Michigan's Consumer sentiment index came in at 72.0 its lowest level of the year, down from 73.2 in June.
The lousy trend of hiring coupled with global uncertainties and a volatile stock market have weakened household spending which accounts for 70% of the economy. The Michigan survey's index of consumer expectations for six months from now also fell to a yearly low to 64.8 from 67.8.
Besides Wells and JP Morgan here are two other companies making news today.
A flood of reports from other corporations follows next week before gradually slowing to a trickle by the month's end.
How investors perceive those numbers could well kick off an up- or downtrend in share prices that will continue for weeks, or even months.
That is especially true if there is an "earnings surprise."
An "earnings surprise" occurs when the revenues and profits a company reports differ significantly from analyst expectations.
Positive surprises - earnings that beat the pre-report forecasts - tend to drive stock prices higher, while negative surprises send them lower.
The bigger the surprise, the more rapid and dramatic the move becomes.
Will JPMorgan (NYSE: JPM) Earnings Surprise?One prime candidate for an earnings surprise in this cycle is JPMorgan Chase.
Usually considered one of the strongest companies in the financial sector, JPM would normally be expected to surpass the pre-report estimates. After all, the company has beat earnings in three of the past four quarters - including an 11% surprise in the January-March period, when earnings came in at $1.31 a share vs. a projected $1.18.
However, the company has been rocked by controversy following revelations that it suffered more than $4 billion in trading losses on what JPM called a "hedging strategy" but others described as an outright "bet" on interest rates.